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Russian Server's Hosting of Infringing Pics Cannot Give Rise to Liability Under U.S. Law

Thursday, July 18, 2013
By Anandashankar Mazumdar

The hosting of allegedly infringing content on internet servers located in Russia cannot give rise to liability under U.S. copyright law, the U.S. District Court for the Northern District of California ruled July 12 (Perfect 10 Inc. v. Yandex N.V., N.D. Cal., No. 3:12-cv-01521-WHA, 7/12/13).

Granting a motion for partial summary judgment, the court also found that to the extent that thumbnail images used to compile search results were for a time hosted on servers in the United States, this use was sufficiently transformative to constitute fair use.


Perfect 10 Assiduously Protects Copyrights
In 1997, Norman A. Zadeh a/k/a Norm Zada--who has been, among other things, a computer science professor, textbook author, professional poker player, and investment advisor--began publishingPerfect 10 magazine, which advertised itself as featuring images of women whose bodies had not been surgically enhanced. He was inspired to do so when an acquaintance of his was rejected as a model byPlayboy magazine. By the early 2000s, the print edition had ceased, but Perfect 10 Inc. of California continued to offer adult-oriented entertainment on the internet, particularly in the form of images of nude women.

Perfect 10 has been involved in numerous legal proceedings against parties such as search engines, online advertisers, aggregators, payment service providers, and rogue website operators, seeking to prevent unauthorized copying of its images.

Yandex N.V. of the Netherlands operates internet search functions through multiple subsidiaries, including Yandex Inc. of Palo Alto, Calif., which controls the domain name yandex.com, and Yandex L.L.C. of Russia, which controls the domain name yandex.ru. When a user executes a search on the website associated with yandex.com, the search results are provided by yandex.ru.

The Yandex search engine is the world's fourth most popular search engine and the No. 1 search engine in Russia.

Perfect 10 objected to Yandex's unauthorized copying, displaying, and linking to its images, and its display of advertising in proximity to such images. Perfect 10 sent hundreds of takedown notices pursuant to the Digital Millennium Copyright Act, 17 U.S.C. §512, asking Yandex to remove what it considered infringing images and links. Later, Perfect 10 sued Yandex, alleging direct and contributory copyright infringement. In an earlier decision, the court partially granted summary judgment in Perfect 10's favor regarding the adequacy of its DMCA notices.

Yandex then moved for partial summary judgment.


Anti-Extraterritoriality Principle Bars Liability
Judge William Alsup determined that to the extent that Perfect 10's infringement claims were based on the hosting of full-sized images on servers located outside the United States--specifically, in Russia--the anti-extraterritoriality principle prevented Perfect 10 from seeking redress under the Copyright Act.

The court rejected the argument that Perfect 10's claims could reach these copies because internet users in the United States could access images residing on Russian internet servers. In making this argument, Perfect 10 cited Perfect 10 Inc. v. Amazon.com Inc., 508 F.3d 1146, 82 U.S.P.Q.2d 1609 (9th Cir. 2007). However, the court said:

… nowhere in that decision did our court of appeals endorse the idea that display of a copyrighted image anywhere in the world creates direct copyright liability in the United Sates merely because the image could be downloaded from a server abroad by someone in the United States. Such a principle would destroy the concept of territorially inherent in the Copyright Act for works on the internet.

Perfect 10 also laid direct infringement claims against Yandex based on a ninth-month period when Yandex had indeed maintained servers in the United States. Unlike the Russian servers, however, these U.S.-based servers did not host full-size images, only thumbnail versions that were used to display search results.

Applying the four factors set forth in 17 U.S.C. §107, the court found that this use constituted fair use. In particular, the court found that the use of thumbnail images in order to facilitate searches constituted a transformative use.

The link to a third-party server that hosted a possibly infringing full-size image did not subject Yandex to liability, the court said.

Turning to Perfect 10's claims of contributory and vicarious liability, the court again relied on the principal of extraterritoriality. To the extent that the relevant direct infringement had occurred in Russia, there was no infringement under the Copyright Act, and, thus, there could be no indirect liability arising out of such acts.

The court thus granted Yandex's motion for partial summary judgment.

Perfect 10 was represented by Lynell Diondra Davis of Los Angeles. Yandex was represented by Daniel C. Posner and Diane M. Doolittle of Quinn Emanuel Urquhart & Sullivan, Redwood Shores, Calif.

 


Text is available at http://www.bloomberglaw.com/public/document/Perfect_10_Inc_v_Yandex_NV_Docket_No_312cv01521_ND_Cal_Mar_27_201/1.

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